Correlation Between Cheng Uei and Acbel Polytech
Can any of the company-specific risk be diversified away by investing in both Cheng Uei and Acbel Polytech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cheng Uei and Acbel Polytech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Uei Precision and Acbel Polytech, you can compare the effects of market volatilities on Cheng Uei and Acbel Polytech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cheng Uei with a short position of Acbel Polytech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Uei and Acbel Polytech.
Diversification Opportunities for Cheng Uei and Acbel Polytech
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheng and Acbel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Uei Precision and Acbel Polytech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acbel Polytech and Cheng Uei is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cheng Uei Precision are associated (or correlated) with Acbel Polytech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acbel Polytech has no effect on the direction of Cheng Uei i.e., Cheng Uei and Acbel Polytech go up and down completely randomly.
Pair Corralation between Cheng Uei and Acbel Polytech
Assuming the 90 days trading horizon Cheng Uei Precision is expected to generate 1.47 times more return on investment than Acbel Polytech. However, Cheng Uei is 1.47 times more volatile than Acbel Polytech. It trades about 0.05 of its potential returns per unit of risk. Acbel Polytech is currently generating about -0.02 per unit of risk. If you would invest 6,960 in Cheng Uei Precision on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Cheng Uei Precision or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheng Uei Precision vs. Acbel Polytech
Performance |
| Timeline |
| Cheng Uei Precision |
| Acbel Polytech |
Cheng Uei and Acbel Polytech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Uei and Acbel Polytech
The main advantage of trading using opposite Cheng Uei and Acbel Polytech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Uei position performs unexpectedly, Acbel Polytech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Acbel Polytech will offset losses from the drop in Acbel Polytech's long position.| Cheng Uei vs. Taiwan Semiconductor Manufacturing | Cheng Uei vs. Yang Ming Marine | Cheng Uei vs. ASE Industrial Holding | Cheng Uei vs. AU Optronics |
| Acbel Polytech vs. Cheng Uei Precision | Acbel Polytech vs. Gemtek Technology Co | Acbel Polytech vs. Kinpo Electronics | Acbel Polytech vs. Darfon Electronics Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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